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In the entry to record an employee's pay, which account is debited for the full gross pay amount before deductions?
ASalary Expense
BCash
CFederal Income Tax Payable
DPayroll Tax Expense
Answer & Solution
Correct answer: A. Salary Expense
1. Gross pay is the employer's cost of the employee's labour, recorded as Salary Expense.
2. Salary Expense is debited for the full gross amount.
3. The withheld taxes are credited to liability accounts, and Cash is credited for net pay.
4. Payroll Tax Expense is a separate entry for the employer's own taxes, not gross wages. Hence Salary Expense.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §5.2 "Payroll", p.212_
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